Supreme Court Questions ED’s Federal Overreach Tactics

The Tamil Nadu State Marketing Corporation (Tasmac) raids in relation to financial irregularities were criticised by the Supreme Court on Thursday, which stated that the Enforcement Directorate is going beyond its bounds. A bench made up of Justice A.G. Masih and Chief Justice of India B.R. Gavai voiced serious concerns about the ED’s actions, stating three times that the agency was going beyond its bounds. The Supreme Court declared, “ED is crossing all limits,” before halting the investigation into the state-run liquor store.

The law officer objected to the order, claiming that the ED was not going beyond its bounds “at least in this case” and that the corruption involved was worth over Rs 1,000 crore. Senior advocates Kapil Sibal and Amit Nand Tiwari arguments that the state has filed more than 40 formal complaints in cases involving the distribution of liquor store licenses since 2014, and that the ED has now intervened and raided the TASMAC, were noted by the bench.” Enforcement Directorate is violating federal principle, how can it raid Tasmac,” responded the Supreme Court. The bench gave ED a two-week window to respond. The enforcement agency insisted that there was significant financial misconduct in this case.

The Tamil Nadu government filed a plea contesting the ED’s raids on Tasmac’s property, and the stay was granted. Senior DMK leader R.S. Bharathi referred to ED as a “blackmailing organisation” and described it as a “big blow” to the BJP’s attempts to discredit the DMK-led state government. Since taking power in 2021, the DMK government led by M K Stalin in Tamil Nadu has grown in popularity, and the Chief Minister’s reputation has increased.

“The BJP leaders used to make all kinds of charges, and the ED was used to malign the DMK because they couldn’t handle this and the DMK alliance’s electoral victory after 2021,” Bharathi said. “It is a huge blow to such things that the SC is deferring to the sentiments of the Tamil Nadu people by halting the ED investigation against TASMAC.” “The (SC) order is welcomed,” he said. Following this development, Bharathi urged the union government to refrain from abusing the ED. By citing recent instances in which ED officials were detained by Tamil Nadu and Kerala state police on bribery charges, the former MP bolstered his claims that the ED is a “blackmailing organisation.”

The Tasmac row: what is it?

The ED conducted extensive searches and interrogated IAS officer S Visakan, managing director of Tasmac, in connection with suspected financial irregularities. The investigation began at 6 am and included raids at his Manapakkam residence and multiple locations across Chennai. ED officials and CRPF personnel also searched various premises, including film producer Akash Baskaran’s house in Teynampet.

Visakan, a man suspected of a Rs 1,000 crore scam, was arrested after an eight-hour search at his residence. The ED had previously summoned him twice, but they were not complied. The agency also searched Tasmac’s head office, distilleries, and breweries in March, focusing on illegal cash generation through inflated bottle prices.

The Directorate of Vigilance and Anti-Corruption (DVAC) filed FIRs in 2016 and 2021, which sparked the investigation under the Prevention of Money Laundering Act (PMLA). Visakan was detained for two days at Tasmac’s office. Tasmac’s legal challenge to the ED searches was unsuccessful, with the Madras High Court rejecting their plea.